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Europe’s biggest privately owned cinema operator has lined up financial backing from its new shareholders to help assemble a takeover tilt at Cineworld, its stricken rival.

Sky News has learnt that funds managed by Barings and Farallon Capital Management have agreed to provide capital to Vue International to support strategic acquisitions.

City sources said that Vue, with support from the two funds, would be among the bidders for Cineworld ahead of a deadline set by the latter’s advisers later this week.

Cineworld, which is listed in London and like Vue ranks among Britain’s biggest cinema chains, has filed for Chapter 11 bankruptcy protection in the US, and is now running a formal auction of its assets.

Last month, the company announced that it would “run a marketing process in pursuit of a value maximizing transaction for the Group’s assets, focused on proposals for the Group as a whole”.

“Cineworld has not initiated and does not intend to initiate a separate marketing process for the sale of any of its assets on an individual basis.”

Cineworld’s shares have slumped by 90% during the last year, and the entire group now has a market value of less than £60m, reflecting the fact that investors face being wiped out in any sale.

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The identity of other prospective bidders for Cineworld was unclear on Monday.

Like the rest of the industry, Vue was badly hit by the pandemic and was forced to go through its own financial restructuring, which was completed just weeks ago.

After a £470m debt-for-equity swap, the company’s balance sheet is now in robust shape, with founder Tim Richards stating publicly that he wants to exploit opportunities to consolidate the sector.

A Vue spokesperson said on Monday: “Our focus at Vue remains on managing the strong recovery we are seeing in our business.

“While it would therefore be premature to speculate about any acquisitions at this stage, we continually evaluate a range of possible opportunities.”

Vue is thought likely to be keenest to own Cineworld assets in a selected number of countries, meaning it may have to line up buyers for those it does not want.

The cinema industry has been bolstered by the recent release of hits such as the Avatar sequel, while two of the top three biggest films in UK history have been released in the last couple of years – Daniel Craig’s final appearance as James Bond in No Time To Die, and Spider-Man: No Way Home.

Last year’s debt-for-equity swap saw Vue’s existing Canadian pension fund shareholders, the Alberta Investment Management Corporation (AIMCo) and Omers, relinquish their ownership status.

They had taken control of Vue in 2013 in a deal worth close to £1bn and subsequently presided over a string of acquisitions which helped turn the group into one of Europe’s largest cinema operators.

In 2019 – a record year for Vue – they began to explore a sale but did not conclude a deal before the COVID-19 crisis brought the leisure industry to its knees.

Its recent financial restructuring also gave the company, which employs more than 8,000 people, access to an additional £75m of liquidity.

Mr Richards, who also chairs the British Film Institute, has talked about the post-pandemic era becoming “the second golden age of cinema” as audiences flock back to entertainment destinations.

Vue trades from just about 230 sites, operating nearly 2,000 screens in nine European markets, including Germany, Italy, and Poland.

The company was forced to furlough thousands of UK-based employees during the pandemic, with its sites shut for months.

Mr Richards was also forced into a brief skirmish with Vue’s UK landlords as he sought rent reductions during the period of closures.

In the UK, Vue ranks behind only Cineworld and Odeon by number of sites.

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US-listed Ulta Beauty swoops on high street chain Space NK

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US-listed Ulta Beauty swoops on high street chain Space NK

A New York-listed company with a valuation of more than $21bn is to snap up Space NK, the British high street beauty chain.

Sky News has learnt that Ulta Beauty, which operates close to 1,500 stores, is on the verge of a deal to buy Space NK from existing owner Manzanita Capital.

Ulta Beauty is understood to have registered an acquisition vehicle at Companies House in recent weeks.

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The exact price being paid by Ulta was unclear on Thursday morning, although one source said it was likely to be well in excess of £300m.

Manzanita Capital, a private investment firm, engaged bankers at Raymond James to oversee an auction in April 2024.

The firm has owned Space NK for more than 20 years.

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Manzanita has also owned the French perfume house Diptyque and Susanne Kaufmann, an Austrian luxury skincare brand.

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Founded in 1993 by Nicky Kinnaird, Space NK – which is named after her initials – trades from dozens of stores and employs more than 1,000 people.

It specialises in high-end skincare and cosmetics products.

Manzanita previously explored a sale of Space NK in 2018, hiring Goldman Sachs to handle a strategic review, but opted not to proceed with a deal.

None of Ulta, Manzanita, Space NK and Raymond James could be reached for comment.

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Royal Mail to scrap second-class post on Saturdays and some weekdays

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Royal Mail to scrap second-class post on Saturdays and some weekdays

Royal Mail is to be allowed to scrap Saturday second-class stamp deliveries, under a series of reforms proposed by the communications regulator.

From 28 July, Royal Mail will also be allowed to deliver second-class letters on alternate weekdays, Ofcom said.

The post will still be delivered within three working days of collection from Monday to Friday.

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The proposals had already been raised by Ofcom after a consultation was announced in 2024, and the scale back was proposed early this year.

Royal Mail had repeatedly failed to meet the so-called universal service obligation to deliver post within set periods of time.

Those delivery targets are now being revised downwards.

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Rather than having to have 93% of first-class mail delivered the next day, 90% will be legally allowed.

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The sale of Royal Mail was approved in December

The target for second-class mail deliveries will be lowered from 98.5% to arrive within three working days to 95%.

A review of stamp prices has also been announced by Ofcom amid concerns over affordability, with a consultation set to be launched next year.

It’s good news for Royal Mail and its new owner, the Czech billionaire Daniel Kretinsky. Ofcom estimates the changes will bring savings of between £250m and £425m.

A welcome change?

Unsurprisingly, the company welcomed the announcement.

“It is good news for customers across the UK as it supports the delivery of a reliable, efficient and financially sustainable universal service,” said Martin Seidenberg, the group chief executive of Royal Mail’s parent company, International Distribution Services.

“It follows extensive consultation with thousands of people and businesses to ensure that the postal service better reflects their needs and the realities of how customers send and receive mail today.”

Citizens Advice, however, doubted whether services would improve as a result of the changes.

“Today, Ofcom missed a major opportunity to bring about meaningful change,” said Tom MacInnes, the director of policy at Citizens Advice.

“Pushing ahead with plans to slash services and relax delivery targets in the name of savings won’t automatically make letter deliveries more reliable or improve standards.”

Acknowledging long delays “where letters have taken weeks to arrive”, Ofcom said it set Royal Mail new enforceable targets so 99% of mail has to be delivered no more than two days late.

Changing habits

Less than a third of letters are sent now than 20 years ago, and it is forecast to fall to about a fifth of the letters previously sent.

According to Ofcom research, people want reliability and affordability more than speedy delivery.

Royal Mail has been loss-making in recent years as revenues fell.

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In response to Ofcom’s changes, a government spokesperson said: “The public expects a well-run postal service, with letters arriving on time across the country without it costing the earth. With the way people use postal services having changed, it’s right the regulator has looked at this.

“We now need Royal Mail to work with unions and posties to deliver a service that people expect, and this includes maintaining the principle of one price to send a letter anywhere in the UK”.

Ofcom said it has told Royal Mail to hold regular meetings with consumer bodies and industry groups to hear their experiences implementing the changes.

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A pub a day to close this year, industry body warns as it calls for cut to tax burden

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A pub a day to close this year, industry body warns as it calls for cut to tax burden

An industry body has warned that the equivalent of more than one pub a day is set to close across Great Britain this year.

According to the British Beer and Pub Association (BBPA), an estimated 378 venues will shut down across England, Wales and Scotland.

This would amount to more than 5,600 direct job losses, the industry body warns. It has called for a reduction in the cumulative tax and regulatory burden for the hospitality sector – including cutting business rates and beer duty.

The body – representing members that brew 90% of British beer and own more than 20,000 pubs – said such measures would slow the rate at which bars are closing.

BBPA chief executive Emma McClarkin said that while pubs are trading well, “most of the money that goes into the till goes straight back out in bills and taxes”.

“For many, it’s impossible to make a profit, which all too often leads to pubs turning off the lights for the last time,” she said.

“When a pub closes, it puts people out of a job, deprives communities of their heart and soul, and hurts the local economy.”

She urged the government to “proceed with meaningful business rates reform, mitigate these eye-watering new employment and EPR (extended producer responsibility) costs, and cut beer duty”.

“We’re not asking for special treatment, we just want the sector’s rich potential unleashed,” she added.

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The government has said it plans to reform the current business rates system, saying in March that an interim report on the measure would be published this summer.

From April, relief on property tax – that came in following the COVID-19 pandemic – was cut from 75% to 40%, leading to higher bills for hospitality, retail and leisure businesses.

The rate of employer National Insurance Contributions also rose from 13.8% to 15% that month, and the wage threshold was lowered from £9,100 to £5,000, under measures announced by Rachel Reeves in the October budget.

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